Insider Buying: The Water Oasis Group Limited (HKG:1161) Independent Non-Executive Director Just Bought 20% More Shares

By
Simply Wall St
Published
March 22, 2022
SEHK:1161
Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Chun Nam Wong, the Independent Non-Executive Director of Water Oasis Group Limited (HKG:1161) recently shelled out HK$162k to buy stock, at HK$1.35 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 20%.

Check out our latest analysis for Water Oasis Group

The Last 12 Months Of Insider Transactions At Water Oasis Group

In the last twelve months, the biggest single sale by an insider was when the insider, Lai Ying Ling, sold HK$6.1m worth of shares at a price of HK$0.80 per share. That means that an insider was selling shares at slightly below the current price (HK$1.26). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 5.5% of Lai Ying Ling's holding.

Over the last year, we can see that insiders have bought 8.51m shares worth HK$10m. On the other hand they divested 21.52m shares, for HK$24m. All up, insiders sold more shares in Water Oasis Group than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
SEHK:1161 Insider Trading Volume March 22nd 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Water Oasis Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Water Oasis Group insiders own 69% of the company, worth about HK$591m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Water Oasis Group Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Water Oasis Group, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Water Oasis Group is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Water Oasis Group and we suggest you have a look.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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